Turquoise Innovations Inc.has introduced a unique software that has no competition in the market.The company has incurred huge research and development costs in order to commercialize this software.Several business firms have been waiting for the release of this product as it saves their cost of outsourcing finance functions.Hence,the best pricing strategy this product will be _____.

Question

Quizplus · Accepted Answer

Price skimming is the best pricing strategy in this scenario as the product has no competition and incurs high research and development costs. This strategy involves setting a high initial price and gradually reducing it over time. This approach allows the company to recoup its initial investment and generate maximum revenue before competitors enter the market. As several firms are waiting for the release of the product, they are likely to pay a premium price in order to gain access to the unique software.